Crypto's Central Authority Exposed: Circle and Tether Freeze Funds in Hack

The decentralized finance (DeFi) community was recently reminded of the central authority that lies beneath its surface when Circle and Tether froze $318,000 in a wallet linked to the recent Bitget hack. The hack, which occurred in September 2026, resulted in the theft of $351 million.

Within hours of the hack, Circle and Tether blacklisted the hacker's wallet, effectively freezing the funds. This move was hailed as a success by some, but others pointed out that it highlighted the decentralized nature of DeFi is not as decentralized as its proponents claim.

The hack demonstrated that while the protocol may be decentralized, there are still entities with significant control over the network. In this case, Circle and Tether exercised their authority to freeze funds associated with illegal activity, effectively overriding the decentralized nature of the system.